DraftKings Brings In $300 Million Led By Fox Sports – Forbes

Daily fantasy sports operator DraftKings is expected to announce today the raising of $300 million in a new round led by Fox Fox Sports.  The new raise will increase overall third party investment in DraftKings to $426 million.  It comes on the heels of its chief rival FanDuel completing a Series E round of financing for $275 million and firmly puts numbers 1 and 2 in the daily fantasy world at a distance from other competitors in the space when it comes to raising capital and forging key corporate relationships.

FanDuel’s important investors include NBC Sports Ventures and the National Basketball Association.  DraftKings’ new round of fundraising adds the National Hockey League, Major League Soccer, Madison Square Garden to a mix of previous investors that also includes Major League Baseball.  According to The New York Times,  Fox Sports is the lead investor in DraftKings’ $300 million raise, which will provide Fox Sports with approximately 11% in equity.

Major League Baseball decided to reinvest in DraftKings and the Kraft Group, which owns the New England Patriots, also added money in DraftKings’ latest round, per Re/code.

Expect to continue to see a litany of DraftKings advertisements on ESPN ESPN and now Fox Sports, as the company puts its new money to work.  Re/code indicates that while DraftKings’ $250 million advertisement deal with ESPN is exclusive in nature, its agreement on a similar spend with Fox Sports is non-exclusive.  Thus, Fox Sports is able to advertise FanDuel’s service and other competitors as well.

The one party that remains interestingly absent from the plethora of fantasy-related news is the National Football League.  While many of its member teams have entered into contractual relationships with major daily fantasy websites (including the Kraft Group now directly investing in DraftKings), the league has remained on the sidelines.  Furthermore, DraftKings’ latest raise now puts the NBA, NHL and MLB in bed with either FanDuel or DraftKings.  Meanwhile, the NFL has yet to exploit a deal with a fantasy operator for direct monetary gain.  The NFL could be holding out for a more lucrative deal, assuming that the market will only continue to drive up the price for a partnership.

At a minimum, it may be safely assumed that the various major U.S. professional leagues (including now the MLS) have taken the position that daily fantasy sports operations are (i.e. FanDuel and DraftKings) are legally operating within the confines of the 2006 Unlawful Internet Gambling Enforcement Act.  If there was any concern that such operations were involved in betting or wagering, then it would be hard to fathom that the leagues would be partnering with daily fantasy operations, let alone putting money into their coffers.  That is especially true when the leagues continue to claim that legalized sports gambling would seriously threaten the integrity of their respective games.

Darren Heitner is a lawyer and the Founder of South Florida-based HEITNER LEGAL, P.L.L.C., which has a focus on Sports Law and Entertainment Law.

Follow @DarrenHeitner